Two New Internet Phone Offerings Join the Market on Monday

Lycos, the internet portal owned by Spanish
telecommunications company Telefonica SA, has launched Lycos Phone, a Windows
based program that provides free phone calls when the user signs up for
promotional offers for credit cards or the Netflix DVD service and is partially
funded by banner ads displayed within the application. Don't want to sign up for
credit cards and other promotional offers? No problem. After users exhaust
their initial pool of 100 free minutes they can continue to use the service to
make domestic calls for 1 cent a minute. Not only does Lycos Phone provide free
or cheap VOIP outbound calling, but they also provide free U.S. phone
numbers for incoming calls, which many internet based PC VOIP services don't
do. The Lycos Phone service also provides PC to PC video calling, text
messaging, and movie previews.

The other offering is from Jajah, an Austrian based company
funded by U.S.
venture capital firm Sequoia Capital. Jajah co-founder Roman Scharf released a
fee based PC to phone service last year, but soon found that users were
primarily attracted to the service because of the low cost. Knowing that
eventually someone is going to provide a similar service at a lower cost, Scharf
knew that they had to take a look at their service and offer something
different that would attract and retain users. What they came up with was a revolutionary
service that allows users to use their own phone to make calls using Jajah as
an intermediary. Jajah users visit the company's web site and enter their own
phone number along with the number that they wish to call. Jajah then rings the
caller's number and after the user picks up it dials the other number,
connecting the two lines. Domestic U.S.
calls cost about 1.7 cents per minute while an international call such as U.S. to France costs about 1.9 cents per
minute. The Jajah service is currently in beta with 59 percent of its visitors
signing up for service and an expected subscriber base of 1 million plus by the
end of the year.